Informal Cooperation among Competition Agencies in Specific

Cases: Experience of the Russian Federation

Anatoly Golomolzin,

Deputy Head of the FAS Russia

FEDERAL ANTIMONOPOLY SERVICE

14th Session of Intergovernmental Group of Experts

9 July 2014

Geneva

The views expressed are those of the author and do not necessarily reflect the views of UNCTAD

The main directions of cooperation

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Eurasian

Economic

Integration

Commonwealth

of Independent

States (CIS)

BRICS/APEC/

EU

Bilateral

cooperation

with foreign

competition

authorities

International

Organizations

ICN/OECD/UNCTAD

FAS Russia

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Exchange of non-

confidential and

confidential information

Agreements and

Memorandums on

cooperation

Consultations Conferences, bilateral

meetings

International Working Groups

The main tools of cooperation

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1. Cooperation within Commonwealth of

Independent States (CIS)

1.1. Cooperation within Commonwealth of Independent States

(CIS)

Established in 1993.

Aim: to coordinate formation of the legal and organizational basis for

the purposes of prevention, restriction and suppression of

anticompetitive practices and unfair competition within the CIS

Economic Area.

The legal framework:

o The Treaty on Implementation of the Coordinated Antimonopoly Policy;

o Regulation on Cooperation of the States in Suppression of the Monopolistic

Activity and the Unfair Competition.

ICAP Members: Competition Agencies (CAs) of Azerbaijan,

Armenia, Belarus, Kazakhstan, Kyrgyz Republic, Moldova, Russia,

Tajikistan, Uzbekistan and Ukraine.

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Interstate Council for Antimonopoly Policy (ICAP)

CIS Countries’ antimonopoly legislation were analyzed

with the aim to develop the common approaches to the

harmonization. The Model law was adopted.

The ICAP has achieved the following results:

o decrease of antimonopoly law infringements in the international

markets of the CIS Countries;

o development of competition both in the domestic markets and in

external economic activities;

o elimination of barriers in the movement of goods and services

within the CIS Economic Area.

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1.2. Cooperation within Commonwealth of Independent States

(CIS)

Interstate Council for Antimonopoly Policy (ICAP)

In 2006 the Headquarters for Joint Investigations of

Violations of the Antimonopoly Legislation in the CIS

Countries was established in the framework of the ICAP.

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1.3. Cooperation within Commonwealth of Independent States

(CIS)

Market analysis and investigations of anticompetitive

practices of companies performing on the territories of

different CIS countries are conducted by CAs on the

voluntary basis.

Nowadays, the pharmaceutical market, the market of oil

and oil products and the market of grain are in the purview

of the Headquarters.

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1.4. Cooperation within Commonwealth of Independent States

(CIS)

Results of previous monitoring (investigations) by the Headquarters

Air transportation

market

Market of

telecommunications

• Report on Recommendations for

Competition Development was

adopted by the Council of Heads of

CIS Governments in 2008

• During the period 2008-2010 air

transportation in the CIS countries

increases 2.3 times due to competition

measures

• The Report on Recommendations

for Competition Development was

adopted by the Council of Heads of

CIS Governments in 2010

• In 2010 a case was investigated

jointly with CA of Republic of

Kazakhstan

In 2010, the FAS Russia and the Agency of the Republic of Kazakhstan for

Competition Protection jointly investigated a case in relation to Russian and

Kazakh telecom companies in the markets of roaming services. Later other

CIS countries joined the investigation.

Results:

o The volume of traffic increased 2-4 times;

o Tariffs on voice calls, Internet and SMS decreased 1.5 – 4 times.

After the investigation the companies continued to decrease tariffs by

themselves without any authoritative measures. As a result:

o Traffic increased 2-10 times;

o Tariffs on SMS decreased 3 times, voice calls – 9 times, Internet – 44 times.

The loyalty of consumers increased: in 2010 every 4th person used

roaming services; at present 2 of 3 persons are using roaming.

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1.5. Cooperation within Commonwealth of Independent States

(CIS)

Joint investigation of the FAS Russia and Agency of the Republic of

Kazakhstan for Competition Protection: market of telecommunications

2. Cooperation within Eurasian Economic

Integration

(Belarus, Kazakhstan and Russia)

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2.1. Cooperation within Eurasian Economic Integration

The main legislative act in this regard is the Treaty of Eurasian

Economic Union (EEU), in which provisions are established on

competition policy, control of subsidizing, regulation of natural

monopolies’ tariffs, non-discriminatory access to natural monopolies’

services, creation of united markets in the period of 2015-2022.

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Since 2006 the Republic of Belarus, the Republic of Kazakhstan and

the Russian Federation started integration in all economic spheres

including competition policy.

During the period of 2006-2013 the legal framework for cooperation

between CAs of Member-States of Eurasian Economic Area (EEA) and

Eurasian Economic commission (EEC) was created.

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2.2. Cooperation within Eurasian Economic Integration

Development of the Agreement on

Protection of Confidential Information and

Liability for its Disclosure in the process of

Exercise of EEC its Powers of Monitoring

the Compliance of the Common Rules of

Competition

Meetings of the Heads of CAs of the

Member-States of EEA and the Member of

Collegium (Minister) for competition and

antimonopoly regulation of EEC.

Creation of Advisory Board on Competition

and joint working groups on the basis of

EEC.

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3. International Working Groups

International Working Group on Investigating Issues on Pricing at

the Oil Product Market and Methods of its Functioning was

established on the initiative of the FAS Russia and Federal

Competition Authority of Austria in 2012. In the meeting 20 countries

participated.

The objective: to assist formation of pricing indices reflecting fair

prices to oil and oil products formed in the market conditions and to

ensure competitive pricing within the framework of organized forms

of trade with oil and oil products.

The main tasks:

o exchange of experience and approaches to enforcement of competition law at

the oil product markets;

o research of the pricing issues, including correlation of world prices at the

international oil market and internal markets;

o exchange of experience in the field of regulation within the framework of

organized forms of trade with oil and oil products.

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3.1. Oil Working Group

Results:

Relevance of institutional changes in the oil products market (example: IATA

on aviation fuel)

The need to strengthen international cooperation (example: IOSCO)

The Platform is needed which will allow the exchange of information on the

oil and petroleum products markets among the CAs and with other

international organizations:

o Data on situation and changes in the market;

o Description of (significant) cases on violating antimonopoly legislation,

large mergers and acquisitions, and market analyses;

o Issues of methodology, enforcement of antimonopoly legislation;

o And other issues.

The positive experience of CIS in the issue of formation of stock and off-

stock indexes and prices in comparison with foreign markets

The Brochure on the results, tasks and development strategy of Oil Working

Group was published (distributed among the delegates)

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3.2. Oil Working Group

International Working Group for Research on the Competition Issues in

the Pharmaceutical Sector was established in 2012 at the initiative of

the FAS Russia and the Italian Competition Authority with participation

of 17 CAs.

The key aim is to promote development of competition environment in

the pharmaceutical market and to ensure the availability of medicines to

the consumers.

Objectives of the Working Group:

o Sharing experience in and approaches to antimonopoly law enforcement in the

pharmaceutical market;

o Coordinating activity of the CAs (Members of the Group) during investigation of

the antimonopoly law infringement.

Report on the results of the Working Group’s activity and

recommendations for competition development is under consideration.

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3.3. Pharmaceutical Working Group

Interactions within the Working Group is performed in the forms of

consultations; meeting with representatives of respective state

authorities, business and other relevant parties; exchange of

information.

International Working Group for Research on the Competition Issues

in the Market of International Telecommunications (Roaming) was

created at the initiative of the FAS Russia and the Turkish

Competition Authority. Representatives of 15 countries participated

in the meetings of the Roaming Working Group.

The aim: to decrease high subscriber and interconnect tariffs in

roaming.

The tasks:

o To assess the long-distance services market of each Member of the Working

Group;

o To elaborate the traffic transmission schemes which would comply with national

legislations of the Roaming Working Group’s Members at the rendering of the

international telecommunication services;

o To research the current situation in pricing of roaming services;

o To assess whether service providers of the Working group’s members violate

national competition legislation.

Two meeting of the Roaming Working Group took place in Kazan

(Russia) and Istanbul (Turkey). The 3rd meeting is expected to be in

September, 2014 in St. Petersburg (Russia).

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3.4 Roaming Working Group

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4. Mechanisms for enhancing informal

cooperation

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4.1. Mechanisms for enhancing informal cooperation

1. Annual International Event “Russian Competition

Day”

2. Training workshops and study visits for

representatives of foreign CAs at the Training-and-

Resourse Center of the FAS Russia in Kazan

3. Requests of information, exchange of texts of

legislative acts, activities reports

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4.2. Mechanisms for enhancing informal cooperation

4. Consultations and negotiations

In 2013 the FAS Russia investigated the

case on supply of pangasius from Vietnam

to the Russian market with active support

of Competition Authority of Vietnam due to

the facts of coordination of activities of

economic entities – competitors, which

resulted in dividing the market between

themselves the volumes of purchasing

pangasius.

The investigation was conducted with

active support of Vietnam’s CA. During

investigation the FAS Russia visited

Vietnam for negotiations. At present, some

companies found guilty in violation of

antimonopoly legislation.

The FAS Russia conducted consultations

with Competition authority of Norway

regarding to initiation of proceedings in the

relation of a number of the Russian import

companies delivering Norway fish to

Russia (a cartel by the market-

sharing).Now the investigation is finished,

certain companies were found guilty in

violation of the Federal Law “On Protection

of Competition”. The total amount of fines

is approximately 4.9 mln. EUR.

THANK YOU!

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